Morales Wants State to Examine Sealed Tobacco Records

Former Texas Attorney General Dan Morales wants the state to reopen the tobacco litigation that landed him in federal prison, saying the state might be entitled to some of the billions of dollars that were awarded to outside attorneys.

Former Texas Attorney General Dan Morales poses at the State Capitol in 1995
Bob Daemmrich

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Former Texas Attorney General Dan Morales wants the state to reopen the tobacco litigation that ended his public career and landed him in federal prison, saying the state might be entitled to some of the billions of dollars that were awarded to outside attorneys in that case.

In a letter to current Attorney General Greg Abbott that was shared with The Texas Tribune, Morales said that documents sealed after his conviction and the settlement of the state’s tobacco litigation might contain information that “may well entitle the state to seek the forfeiture of the attorney fees awarded in the Texas tobacco lawsuit.”

Abbott's staff did not immediately open the package from Morales. And after seeing the Tribune’s copy of Morales’ cover letter saying the documents were sealed by order of a federal judge, Abbott’s staff decided to return Morales’ package unopened. The Tribune provided a copy of the letter when seeking the AG’s comment for this story. Unlike the Trib's version, the package sent to Abbott apparently included the sealed documents.

The Attorney General's office received a package reportedly from Dan Morales. We have been informed that the package includes materials subject to a federal court protective order preventing disclosure of the materials and preventing even the Attorney General's office from reviewing them. Mr. Morales apparently asked the Court for permission to reveal those documents and the court reportedly denied his request.

This office must comply with the court’s order. To avoid any potential violation of the court’s order, the documents are being returned without being inspected or reviewed by this office. Unless and until the court orders that any such documents from Mr. Morales can be reviewed, the Attorney General’s office will comply with the court's order and not inspect documents sent on behalf of Mr. Morales.

The five attorneys — Harold Nix, John O’Quinn, Wayne Reaud, Walter Umphrey and John Eddie Williams — were awarded fees of $3.2 billion, a sum that is being paid out to them as the tobacco companies pay the state of Texas and local governments $17.3 billion. O’Quinn died in an automobile accident in Houston in 2009.

Morales pleaded guilty in 2003 to charges of mail fraud and filing a false tax return and admitted to back-dating official government documents and forging government records for the benefit of himself and others. He was accused of trying to divert some $520 million to another attorney named Marc Murr, who was convicted on related charges.

Morales is not proclaiming his innocence. “My decisions and actions were inexcusable and resulted — justifiably — in my indictment and conviction,” he said in a separate written statement.

His charges that the outside lawyers might owe the state are not new. Even in his early days in prison, he was suggesting the state should try to get the sealed records and contending that they would show misconduct on the part of the five lawyers who won the settlement for the state.

I have requested that my counsel make available to your office, for its review and consideration, the enclosed materials related to a federal protective order issued in my 2003 criminal case emanating from the state’s tobacco litigation. During these proceedings, the tobacco lawyers secretly requested and were secretly granted — in a sealed hearing and over my objection — an order concealing from the public all of their internal documents to which I gained access during discovery.

The Court has since ruled — consistently and over my repeated objections — that these materials are “privileged documents” belonging to the tobacco lawyers. I respectfully disagree. I believe the state’s right to these materials supersedes the privacy rights of the lawyers. And I strongly believe that these documents — particularly those directly relating to the lawyers’ fiduciary duty to the state — should be fully disclosed and made available to state officials. The revelations contained therein may well entitle the state to seek the forfeiture of the attorney fees awarded in the Texas tobacco lawsuit.

I am including herewith a copy of the Court’s protective order for your review and have marked those documents to which it pertains. I would be pleased to assist the state in its consideration and/or pursuit of this prospect. Please let me know if I may be of service. Best personal regards.

Sincerely,

Dan Morales

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